Why use FNDCPASS and not Alter command

FNDCPASS is used to change in application users' password
I was told that if we logon to db and use "Alter user identified by password", this change wont be reflected to applications...
Is this true? what exactly happens in these two cases?
Need ur help....
Regards
Bipin

Once You change the password using FNDCPASS...it will change the password in all
places...it will take careWhen changing the password for APPS using FNDCPASS, you need to run AutoConfig
If your system is NOT AutoConfig enabled, you need to change change the APPS password in the following files manually:
1. $ORACLE_HOME/listener/cfg/wdbsvr.app file as well. (Otherwise users will not
be able to login to the Personal Home Page or Self-service web apps.) This may also be necessary in the $IAS_ORACLE_HOME\Apache\modplsql\cfg\wdbsvr.app file
2. Workflow Notification Mailer - $FND_TOP/resource/wfmail.cfg
3. The concurrrent manager start script.
4. $OA_HTML/bin/appsweb.cfg
5. $AD_TOP/admin/template/CGIcmd.dat may contain the password if it is being used.

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